The founder and CEO of British fashion retailer Ted Baker has resigned.

On Monday (March 4), Ray Kelvin gave up his post following misconduct allegations related to his hugging of colleagues.

The company had announced an independent investigation into misconduct claims against Kelvin in December.

That came in response to an online campaign claiming to represent over 200 employees asking to end, quote, "forced hugging" and "a culture that leaves harassment unchallenged." With Kelvin's resignation, Ted Baker say the investigation would continue with the focus turning to its policies, procedures and handling of complaints.

Kelvin, who is top shareholder with a stake of about 35 percent and has been CEO since its launch in 1988 went on a leave of absence a few days after the investigation began.

Ted Baker opened its first store in Glasgow in 1988 with quirky details on suits, shirts and dresses helping the company stand out from rivals.

Acting Chief Executive Officer Lindsay Page will continue in the role while David Bernstein will act as executive chairman.

Kelvin's resignation comes after Ted Baker's shares plunged last week, as the retailer said 2018-19 earnings would miss forecasts.